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Markets Pulse

Nikkei Hits New 2012 High Again as Yen Falls

By Wei-Zhe Tan, Lillian Ying

Asian stock markets rise on Friday with Japanese shares touching a fresh 2012 high for a second straight session amid persistent weakness in the yen.

The upbeat market sentiment in the region overshadowed comments from U.S. Senate Majority Leader Harry Reid on Thursday that there might not be sufficient time to meet the Jan. 1 deadline to avert the fiscal cliff. The House of Representatives will meet on Sunday in a last-ditch effort to hash out a deal.

“The market has factored in the possibility that talks will spill over to 2013,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi; “it remains a focus of attention, but sooner or later it is going to be solved. Meanwhile, players aren’t willing to let a good Japan trade opportunity go to waste.”

The Nikkei Stock Average hit a new 2012 high for a second consecutive day at 10,421.15 after the greenback continued to rally against the yen as investors expect newly-appointed Japanese prime minister Shinzo Abe and his government to carry out their promises for stronger easing measures and a weaker local currency to revive the flagging economy. The index was recently up 0.8% at 10,403.01.

The U.S. dollar surpassed the ¥86.15 level reached in New York trade versus the yen and climbed to a fresh 28-month high of ¥86.64 early Friday in Asia. The pair was last trading at ¥86.40.

Exporters in Tokyo sustained the rally this week amid a lower yen with Sharp Corp. up 1.7% and Nissan Motor 2.0% higher.